Why is the Gaming Industry Down? Because We Can’t Keep the &#$% Up!

For the first time that I can remember the entire market of video gaming is slowly screeching to a standstill. Top of the line development companies and marketing studios are collapsing and filing for bankruptcy. Entire divisions boarded up and sent packing because of the sub-par economic returns of one game.

As stockcall.com just released,

“2012 did not end on a high note for video game retail sales. According to NPD Group figures, December 2012 marked the thirteenth straight month of declines as sales dropped 22 percent compared to the same period a year earlier. For the full year, video game sales fell to $13.26 billion, 22 percent lower than 2011 sales of $16.99 billion. “Declines have not been uniform, with middle-tier games faring the worst, while the top ten titles generated a whopping 46 percent of December’s dollar sales, up 12 percent year-over-year. Activision Blizzard was on top, with Call of Duty: Black Ops II being the top-selling game in 2012, followed by Madden NFL 13 from Electronic Arts.”

The question is why. Why is such a recession proof division of entertainment displaying all of the tell-tale signs of a dying economy? Is it the stagnancy of the consoles available, the price of games, or the quality of games? No, it’s simply the fact that gamers cannot keep the *#$! up.

The economics of supply and demand is evident in everything. Gaming is no different. Let’s be honest with ourselves here, the amount of options available, in terms of consoles, is really the same as it has always been. Let’s set our time period as the late 80’s to early 90’s as the real true beginning of the home gaming industry. I am aware that the Atari and Colecovision days of the late 70’s-early 80’s may be where some people will choose to begin but, to me personally, the vast majority of gaming during that occurred during that period still focused and occurred in the Video Arcades. During the late 80’s and early 90’s there have always been at least three home console systems to choose from. From either Nintendo, Sega, and PC era of the early days of the 90’s to the Sony-Xbox-Nintendo-PC driven era of today, the console market is relatively unchanged. So the console cannot be the cause of it. None of the main consoles today are outdated in terms of technology, maybe in terms of gamers wanting something more, but they are fully capable systems that allow us to play just about any game we want, so consoles cannot be the cause.

Do we have too many game choices these days?

The price of games has remained relatively stable over the years. I think almost everyone would agree that you would expect to spend between $40 and $60 for a new release game if you purchase it from a retailer, regardless of the system. It has been that way for as long as the current generation of consoles has been around. I understand that the increasing world of “used” games is something many of us, myself included, choose to visit and purchase our games from has some effect on the economy of gaming. Some of you will immediately reach for blaming the economy of the United States as a major influence in the downturn of gaming but, without getting political, the beginning of the economic downturn began in the early 2000’s and has been fluctuating up and down through current times.

So the reality of what is wrong with the gaming industry is simple. There are too many damn gaming developers who are oversaturating the market with games. Now, don’t get me wrong here, I love being able to go the store to spend my hard earned or well saved $60 dollars on a selection of games but not 300 different games. Growing up poor, I remember as a child having to save up my money to go purchase Tecmo Bowl at KB Toy Store. It took me a while to raise the $40. A summer of mowing grass, collecting cans and bottles to recycle, all to get the greatest football game ever. Not much has changed in terms of money. I still have to scrimp and scrounge and plan ahead to purchase any video game that I want. The biggest difference is now, by the time I find the extra money to purchase a game something else has come out to shift the focus of my gaming mind. With the few exceptions of the mass cult following games such as Call of Duty, Madden or anything World of Warcraft, very few games warrant enough desire to play that people will remember it two weeks later when they are out buying a game.

Seriously how anyone can keep up with the vast amount of games that come out is beyond me. Let’s use an example from a single gaming quarter of last year (2012 care of Wikipedia). You have $60 to spend for each month of the quarter or basically the ability to buy 3 games per quarter. I want you to look at this list of games released simple during the second quarter are select which you want to purchase and decide which of those will be your one per month.

Now tell me that after reviewing that list, which is a relatively weak selection of games for not being the holiday season releases, that you could narrow it down to three. I know for a fact, that even today, nearly six months later, there are games on that list that I want to play that I have not purchased and quite honestly did not even remember were out until I started this article. Gaming developers have to realize that it is not the quantity of games that people want but rather the quality of them. There needs to be some collusion by the parent companies to properly plan these things out like they used to. Competition breeds quality. However, with money tight and the phones and tablets starting to put out quality graphics and games, the console gaming market cannot continue to release 25 games a month and expect to create enough buyers to keep their company up. For me personally, $60 is a lot of money. I will not drop it on a game if I am not sure the game is 100% going to make me happy. Can I ever truly have that guarantee, of course not? Can I, however, hedge my bets to which games are more than likely going to please me at that moment of purchase? It is going to be the one that appeals to me at that very moment and everything else will be pushed to the “I’ll get it at the game exchange later on “ list.

Developers have to pull their head out of their asses and focus on releases a few games a month. The gaming industry would rebound if there were no more than 10 games a month released regardless of the console. There is no other way. The problem is not the pricing or the consoles themselves. The problem is simple too many games to choose from in such a short time. This is just simple economics. The more of a product available to a market the less demand there is for it and hence the product marginalizes. The less product available the more demand there is for it and the price increases. This is why people were okay paying $60 dollars. High quality games released in small batches fueled the gaming industry for many years.

I will be waiting for this one though (Bioshock Infinite)

Maybe I am living in the land of hopes, dreams and unicorn farts, but the only way that the industry is going to rebound is to pull out its over-saturated market and focus on a smaller number of higher quality entries. (See the auto industry—consolidate then increase quality). Until they do, gamers will be fighting to keep up with the releases, spending less money and saving what little money they do have for the next 30 minute long solo mission in Call of Duty so they can kill zombies and spend money on new maps. I guess at the end of the day all I can say is thank God for used game stores to remind of how bad I wanted that $10 game when it first came out, too bad I need that $10 to buy Bioshock: Infinite in a month.

The harsh reality of it all is that the amount of games is only going to increase as we get older but that should never be a problem because within each game are a thousand ideas anyone can expand on. It sucks to know that studios are having problems trying keep their teams working hard on the newest AAA titles but it also gives room for the lesser known studios to bring in their grand explosive ideas onto the table.

These companies just need to find the right selling niche like how Valve did with their steam sales.